As we noted last week, pay at Deutsche Bank isn’t exactly evenly distributed: a very small number of people there get almost all of the pie. 93% of people in Deutsche’s investment banking arm earn less than £100k ($141k); 750 people there are earning an average of £1.6m.

This is only likely to get worse. In today’s presentation at the Morgan Stanley European Financial Conference, Deutsche Bank CEO John Cryan explained that although the investment bank is cost cutting, headcount is actually likely to rise this year as Deutsche brings contractors onto its books and makes them into permanent staff.

This won’t be the first time that Deutsche has added heads in a market where it’s supposed to be making cuts. In 2015, it increased non-front office headcount by 15%, or 2,700 people. As a result, the ratio of back office/infrastructure staff to front office revenue generators increased to 2.6:1, as per the chart below.

As the proportion of middle and back office staff rises relative to front office revenue producers, so does the ‘seat cost’ of each front office person in the bank.In their big report on the future of banking this week, Morgan Stanley and Oliver Wyman said that the control costs alone (irrespective of technology) associated with sales and trading positions have increased by 50% since 2010 and now stand at $300k per head.

Deutsche Bank’s front office bankers are already heavily encumbered by its weighty infrastructure function. Cryan’s comments today suggest this encumbrance is only likely to grow. And as the fixed costs associated with each revenue producing employee rise, the pay going to those employees can only fall….